Meanwhile, President Obama held a rally of his own at George Mason University in Fairfax, Va.

Pablo Martinez Monsivais
/ AP

Originally published on October 5, 2012 2:22 pm

With a new report showing the nation's unemployment rate fell to 7.8 percent last month, the Obama administration got good news Friday: Jobs are indeed growing. But, as Republicans noted, the pace remains well below the level needed to provide paychecks for the 12.1 million people seeking them.

The truth is, each party could find evidence to support either a positive or negative spin on the labor market, which is recovering — yet weak.

At a Friday campaign rally in Virginia, President Obama focused on the continued growth. He said the jobs report is "a reminder that this country has come too far to turn back now."

Republican candidate Mitt Romney saw something very different. "If not for all the people who have simply dropped out of the labor force, the real unemployment rate would be closer to 11 percent," he said in a statement.

The competing views both have validity. Before considering the spin, here are the facts:

All this year, the unemployment rate had been vacillating in a narrow range between 8.3 percent and 8.1 percent, where it stood in August. But the rate fell to 7.8 percent in September, after a household survey showed more people say they are working.

The Labor Department also revised some summer data. August payrolls actually rose by 142,000, better than the initially reported 96,000, while July was revised up to 181,000, from an earlier estimate of 141,000. Last month, employers added 114,000 jobs, almost exactly what economists had predicted.

A Negative Take On The Jobs Data

The pace of improvement is far too slow to absorb the backlog of people seeking work. About 100,000 new jobs are needed each month simply to keep pace with population growth.

The jobless rate would be much higher today — more like the 11 percent Romney notes — if labor force participation were as high as when Obama took office. Many people have dropped out of the workplace, either to take early retirement, go back to school or to stay home, because they don't see much hope of finding a good job.

To return to, say, 6 percent unemployment within three years, economists say employers need to be adding about 375,000 workers a month.

Alternatively, A Positive Take

In January 2009, when Obama took the oath of office, the U.S. economy lost more than 800,000 jobs.

By spurring Congress to immediately pass the American Recovery and Reinvestment Act, the president turned around that employment plunge and "kept our economy from swerving over the cliff," according to Rebecca Thiess, a policy analyst at the Economic Policy Institute, a left-leaning research group.

The nonpartisan Congressional Budget Office says the stimulus created up to 3.3 million full-time jobs and helped stabilize the labor market in the 2009-2011 period. Since the recovery kicked in, the private sector has added jobs for 31 straight months, bringing the total to 5.2 million new jobs.

So What's The Outlook?

The past three-and-a-half years could be considered a split decision, with good points and bad. But what lies ahead?

Romney says his economic policies would create about 12 million jobs over the next four years. But many independent economists say that's the same number of jobs that would be created under current policies.

Joseph Davis, chief economist for the mutual fund giant Vanguard, said he doesn't see the unemployment rate improving significantly until Congress takes definitive action to reduce the deficit and the debt. Having lawmakers constantly put off major decisions about taxes and spending is creating tremendous uncertainties for employers who feel they can't make hiring plans until they know what their taxes will be and whether government spending — on infrastructure, defense contracts and more — will continue.

"If we don't see a meaningful change in terms of clearing up policy uncertainty, then it's very difficult to see the economic trajectory change," Davis said. "If we could adopt a credible and binding plan to reduce the deficit, that would go a long way in reducing uncertainty" and opening the door to new employees, he added.

What Are People Saying Today?

Friday's big move in the jobless rate did not go unnoticed by Romney supporters, many of whom suggested the Labor Department manipulated the data. For example, Jack Welch, the retired CEO of General Electric, tweeted that the drop in the jobless rate was "unbelievable," and added this reference to Obama: "can't debate, so change numbers."

The Bureau of Labor Statistics has a reputation for honest work. The monthly jobs report is put together by dozens of career professionals who tabulate and analyze data. Mainstream economists say that with so many people involved, manipulating data is extremely implausible.

Labor Secretary Hilda Solis, speaking on CNBC, said the jobs report is reliable. "These are our best-trained and best-skilled individuals working in the BLS, and it's really ludicrous to hear that kind of statement" from Welch, she said.

The BLS report is supported by an independent measure, which found similar results. Gallup, the polling company, calculated that September's unemployment rate, without seasonal adjustments, fell to 7.9 percent, which was "the lowest [level] Gallup has recorded since it began collecting employment data in January 2010."